On Tuesday August 3rd, AMTD Digital Inc. an Hong Kong Stock Exchange based investment banking company, rose 32,229% since its IPO in NYSE in July 15th from $7.80 to $2,521.72 per share.
Post written by Chakkrit Charoenlai - 04.08.2022
AMTD Digital is a subsidiary of AMTD IDEA, a Chinese financial firm, which shares rose by nearly 500% in conjunction of its subsidiary’s shares run.
"To our knowledge, there are no material circumstances, events nor other matters relating to our Company's business and operating activities since the IPO date" AMTD Digital said in its statement Monday.
We shall ask ourselves how and why such a drastic rise of the shares price, without no remarkable news, no remarkable fundamentals (earnings only $6.93M and no balance sheets or financial statements available for the public to be consulted), but the stock price rose the same. With only 51 employees, the company is totally unknown, the price is not simply justifiable.
“We are one of the most comprehensive digital solutions platforms in Asia, with businesses spanning multiple verticals, including digital financial services, SpiderNet ecosystem solutions, digital media, content and marketing and digital investments” claims the firm.
Some rumors online talk about its low outstanding shares and the massive demand that pushed the price up, but the fact that many people reported the impossibility to buy, short or play options on it shall make investors worried about what this might be, as described by many online users, a pump and dump and money laundering scheme.
It is a high risk stock, that just IPOed, based in a foreign country and very low trading volume, is the stock market still a tool to determine the value of a company based on its fundamental business or just like a casino nowadays?
One of the company main product is a digital platform called “AMTD SpiderNet”. AMTD calls SpiderNet a “metaverse” ecosystem mostly used by fintech start-ups and internet influencers, as per their claims. Digging trought its press releases, we can conclude in simple words, it essentially provides loans and services to startups in exchange for fees, where it get most of its revenue.
In conclusions:
- The P/E ration of 13,160 is absurdly high compare to its sector and the whole market
- Market Cap is not justified, the company is unknown and it has a small revenue compare to other companies with the same Capitalization
“In short - they're a shady fintech loan company and investment bank with a metaverse platform that networks cryptostartups and entrepreneurs together for a fee. In other words, they're all of the hypey buzzwords of 2022”
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